Management By Objectives - MBO

Management by objectives - MBO - is a common sense way of managing employee performance.

As the name goes, the boss agrees a set of objectives with his subordinate for a given period and then measures the subordinates performance against the set objectives. The period of measurement is usually 1 year but there are often quarterly or mid-year reviews to measure progress.

Why is management by objectives important?

It's important for at least five reasons:

1. It creates a sense of direction for team members

2. It provides a useful tool for assessing performance

3. It creates a level playing ground for all. Measurement is objective not subjective.